Teens and Credit

Have you ever seen a 14 year old at the mall with a pile of clothes or electronics pay with a credit card? What crossed your mind at that moment? Either you thought their parents were crazy for ever giving them a credit card, or you recall your own teenage years going spending crazy with your parent's credit card.

Debt and bad credit history are two very important problems in the United States. You probably know lots of people maybe even yourself, whether you know it or not, that are in debt. Where does it all start? Getting into debt usually starts when you are young. If you never learned proper spending habits from your parents, you probably started getting credit cards as early as your teen years or at least in college, and began spending. You bought anything and everything you wanted.

If you do not think about what you are spending your money on, you are not deciding if you can afford it. With credit, you do not have to have the money. If you want a car, you can just finance it and make payments. It does not matter how much money you have.

Any teenager that has not been taught how to manage their money most often does not understand how credit works. If you give them a credit card without any instruction, whenever they want something, they will just buy it. They will buy all the things that they want because the credit card makes them feel rich. Then, when the bill comes, they will not have enough to pay it off, but that will not matter. They will just pay the minimum. Or worse yet, their parents pay the bill and they learn absolutely nothing about spending habits.

If you are considering giving your teenager a credit card, think long and hard about it. Why are you even considering it in the first place? Are you just tired of them asking you for money all the time? Do you want to give it to them for emergencies? Do you want the 'card' to teach them about money? Do you want to help build credit for them? Did they ask you for one?

Out of all those questions, only the credit building is really a good idea. Even then, teens must be able to manage their money before they get a card. If they do not, they will go from no credit to bad credit, which is even worse then no credit. Have your teen prove to you that they understand money management before you give them a credit card. Give them a prepaid card to teach them about using credit cards. This way, they can learn how to spend only the money you have.